Alternatives to the traditional career path
What is the world coming to? Recent evidence suggests that partnership may no longer be the holy grail for private practice lawyers. Recent research within the legal sector highlighted that only 37% of associates aspire to be a partner. At the very least, it is no longer the only thing that matters for our rising stars.
Even worse news for law firms is the fact that many more existing partners are also feeling pretty disillusioned. It seems that life as a partner in private practice is not all it is cracked up to be.
So why are lawyers disillusioned? There are so many factors that could be playing a part, but three things seem to stand out among those who wish to remain in private practice but would prefer to operate outside the traditional model – flexibility, freedom and financial reward.
Flexible working
Let us look at flexibility first. More and more is written about flexible working and work/life balance. The research mentioned earlier showed that over a third of lawyers wanting to leave their firms selected ‘poor work/life balance’ as the principal catalyst.
However, flexibility is much more than doing less work and having more ‘life’. It is much more to do with working hard in a way that fits in with your other ambitions and commitments.
For a working parent this might mean striking a suitable balance between work/client demands and primary childcare. For a successful ‘rainmaker’ it might mean spending every Friday on the golf course.
Professionals are hard-wired to deliver top-class client service, but not everyone feels the need to do so while chained to their desk or at the hours requested to suit the managing partner.
In most commercial sectors there has been a big drive towards flexible working and home working. Companies trust their senior executives and staff to deliver their objectives, regardless of whether they work from home or the office. Can we say the same about most law firms?
Greater control
Freedom is a slightly different concept. Here the lawyer is seeking greater control of their working life.
It isn’t just the time or location of work they aim to control, but the nature of the work, the clients they act for and the way in which they interact with their employer.
How many times are we asked to attend conference calls, meetings, away days, training and other events that seem to add no value and yet soak up our valuable time and energy? Surely this time would have been better spent networking with potential clients or actually working on a client matter.
In every firm most partners spend hours each week doing things at the request of the firm, which the individuals would avoid if given the choice. In some cases it is simply a desire to escape ‘overmanagement’.
A highly successful networker may be adept at bringing in new work for the firm, but if utilisation is low or billable hours below par, they will often still be at the sharp end of a nasty email or call from above.
Financial reward
The final trigger of dissatisfaction is financial reward. This applies mostly to more experienced practitioners with a good track record of winning work. Many of these partners remain in a reward system that provides them with only about a third of the revenues they bring in to the firm.
What is more, as a result of the reforms introduced by the Legal Services Act, there is the possibility of external investment for partners to consider and the potential for the investor, with their focus on the bottom line, to want to see a streamlining of the equity partner pool.
Historically, the benefits of working within a grand behemoth of a city law firm, with all the trappings of support and success, seem to have far outweighed the disadvantage of giving away two-thirds of the income one produces. However, times are changing.
Freelancing
Much has been written of the trend towards ‘freelancing’ epitomised by such firms as Keystone, Excello Law and Halebury, which are in the vanguard of a new wave of ‘virtual law firms’. Generally, solicitors work on an earn-as-you-work basis, from home, or sometimes the client’s office, with the practice providing centralised administration, support and marketing. Under this model, the freelance partner typically retains up to 75% of revenues produced.
If you are confident of your ability to win work or maintain a strong client following then the financial benefits here are self-evident. In fact, this type of virtual law firm offering goes a long way to addressing all three main causes of dissatisfaction and is much more attractive to many people than trying to set up a practice on their own.
However, the appetite for a new way of practising law is growing not only among individual lawyers but at established law firms as well – the model referred to above leaves the law firm hungry. It fails to acknowledge a firm’s need constantly to increase its client base across its practice offering and that is a missed opportunity. And so… a brand new model is born: ‘IV League’.
A very good friend of mine serves as an excellent case study to help illustrate how this new model works. Let’s call him Sam. Until very recently Sam was a high billing, very successful partner in a US law firm in London. Fed up with the politics and overzealous management, Sam knew it was time to look for a suitable move. He rationalised that any lateral move would in time see the same concerns rise to the surface. It was just a matter of time.
Deciding to look for a genuine alternative, Sam identified setting up on his own as one option and joining one of the virtual firms referred to above as the other. He dismissed the notion of setting up his own practice as ‘just too difficult’ and so looked set to go freelance with one of the ‘virtual’ firms. However, a residual concern just would not go away – would his big clients follow him into the unknown?
In talking through the pros and cons of all the options, we identified an entirely new approach thanks largely to a most innovative and entrepreneurial lawyer. This lawyer is a partner at a UK top-30 law firm and the life-changing question he asked of Sam was: ‘Why wouldn’t we offer you that deal?’.
The ‘deal’ was the chance to work ‘freelance’ through their firm and replicate all the benefits of the virtual law firm model – a much greater slice of what he bills, access to associates and administrative support, and a better work-life balance – but operating under the brand and reputation of one of the best firms in the UK. In turn the law firm gets 25% of what Sam bills and, more importantly, access to his clients and the opportunity to cross-sell.
Sam and the law firm in question instantly understood the benefits and an agreement had been signed within weeks. Sam now works two-and-a-half days a week and earns as much, if not more, than he ever did before.
Let us consider this business model in the context of changes brought about by the Legal Services Act. For a lawyer like Sam, a move to a firm that is willing to embrace the alternative business model and the opportunity to offer clients a broader spectrum of services feels like a much more attractive offer.
If Sam is an entrepreneurial lawyer open to possibilities outside the traditional partnership model then he will no doubt be looking for a law firm that is similarly minded. As far as external investment is concerned, what could be more attractive than a lawyer who joins a firm and immediately impacts the bottom line?
The ‘opportunity costs’ and ‘bedding-in’ time associated with a lateral hire are not so prevalent when a lawyer is joining a firm with a group of clients firmly in tow.
The rumbling of discontent in the legal profession with regard to the partnership model should be viewed as an opportunity for a change in approach when it comes to how legal services are delivered. A more innovative business structure – no longer solely reliant on lawyers tied to the traditional partnership model – offers a lawyer more flexibility and a law firm access to a broader client base. All that glitters is gold for lawyers and law firms who are prepared to take the step into the era of different business structures.
Mike Jones is managing director of business development consultancy Intrinsic Values and was formerly the world’s first law firm sales director
